Benzinga - by Nabaparna Bhattacharya, Benzinga Editor.
RBC Capital Markets analyst Wayne Lam upgraded Iamgold Corporation (NYSE: IAG) to Sector Perform from Underperform, raising the price target to $2.75 from $1.75.
The analyst raised the price target to reflect improved near-term SCF and increased gold price forecasts via a recent deck update.
Lam thinks construction risks at the Côté Gold project are better managed given recent (high-cost) financing with visibility to first gold in early 2024, which could provide a re-rating opportunity.
Impending output at Côté is expected to transform the production profile for Iamgold Corporation, providing lower-cost output in Ontario, which is estimated at 393 Koz/yr annually (100% basis) at mine-site AISC of $1,163/oz, notes the analyst.
Lam estimates this to provide IAG 30%+ production growth into 2024 at ~15% lower AISC, helping to offset rising geopolitical risk at Essakane and higher-cost output at Westwood.
Also Read: Golden Opportunity: Iamgold Stock Upgraded By BMO Capital After Stellar Recovery
Looking ahead, the analyst anticipates emphasizing the ramp-up of Côté following the first gold in early 2024, with the balance sheet able to support the project through advancement to steady-state capacity.
With visibility to first gold ahead and steps taken to manage the balance sheet, the analyst is constructive on the near-term outlook but remains cautious given the execution risks ahead.
On the negative side, the analyst remains cautious about ramp-up risk amidst elevated financial leverage and higher-cost operations from existing assets.
For FY23, the analyst expects adjusted EPS of $0.08, higher than the previous $(0.02) expectation.
For FY24, the analyst forecasts adjusted EPS of $0.14, compared with the prior view of $(0.17).
Price Action: IAG shares are trading higher by 4.48% to $2.33 on the last check Tuesday.
Latest Ratings for IAG
| Feb 2022 | BMO Capital | Upgrades | Market Perform | Outperform |
| Nov 2021 | RBC Capital | Maintains | Outperform | |
| Jul 2021 | RBC Capital | Maintains | Outperform |
View the Latest Analyst Ratings
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